Weekly Market Outlook

It turned out to be a fabulous week of trade for Indian equity benchmarks where Bulls completely dominated bears as traders remained optimistic on the back of rising expectations of a rate hike pause by the US Federal Reserve.

The markets’ mood remained upbeat throughout the week and there appeared not to even be an iota of profit booking, as the benchmarks fervently gained from strength to strength, as investors continued to hunt for fundamentally strong stocks.

Markets started the week on an optimistic note as traders got encouragement after Reserve Bank governor Shaktikanta Das said the central bank expects retail inflation to start declining this month.

Traders also took support from Economic Affairs Secretary Ajay Seth’s statement that the government is confident of meeting the fiscal deficit target of 5.9 per cent of gross domestic product (GDP) and the nominal GDP target of 10.5 per cent despite pressure in the initial months of FY24.

Traders shrugged off reports that India’s services sector growth eased in the month of August, but remained among the best in 13 years, with a series-record increase in new export business inducing another sharp expansion in total sales.

Traders took support from Union Finance Minister Nirmala Sitharaman stating that there has been a threefold increase in income tax filing in each bracket, an indication of significant improvement in the formalization of the economy.

Some support also came as government think tank Niti Aayog member Ramesh Chand’s statement that India’s agrochemical industry has the potential to grow more than the current nine per cent notwithstanding the competition from China.

Traders also took note of Reserve Bank of India Governor Shaktikanta Das’ statement that the Unified Payments Interface (UPI) has played a phenomenal role in the FinTech revolution in India. He added Indian fintech industry is projected to generate around $200 billion in revenue by 2030.

Rally on the final day of the week helped markets to extend weekly gains as traders got encouragement with a private report that inflation in India was likely to have eased in August from a 15-month high in July, led by cooling vegetable prices.

Sentiments remained optimistic after a G20 document prepared by the World Bank stated that India has achieved financial inclusion targets in just 6 years which would otherwise have taken at least 47 long years.

BSE movement for the week

The Bombay Stock Exchange (BSE) Sensex surged 1211.75 points or 1.85% to 66,598.91 during the week ended September 08, 2023.

The BSE Midcap index gained 1236.38 points or 3.93% to 32,672.00 and Smallcap index surged 846 points or 2.26% to 38,266.53.

On the sectoral front, S&P BSE PSU was up by 647.69 points or 5.52% to 12,385.36, S&P BSE Realty was up by 221.34 points or 4.91% to 4,732.59, S&P BSE Capital Goods was up by 2,197.48 points or 4.84% to 47,604.04, S&P BSE Power was up by 210.02 points or 4.70% to 4,680.72 were the top gainers.

There were no losers on the BSE.

NSE movement for the week

The Nifty surged 384.65 points or 1.98% to 19,819.95. On the National Stock Exchange (NSE), Bank Nifty was up by 720.30 points or 1.62% to 45,156.40.

Nifty IT was up by 901.30 points or 2.86% to 32,415.65.

Nifty Mid Cap 100 increased by 1532.15 points or 3.88% to 40,977.75 and Nifty Next 50 increased by 1311.05 points or 2.93% to 46,110.80.

FII transactions during the week

Foreign Institutional Investors (FIIs) were net sellers in the equity segment in the week, with gross purchases of Rs 52,995.19 crore and gross sales of Rs 58,456.39 crore, leading to a net outflow of Rs 5,461.20 crore.

They also stood as net buyers in the debt segment with gross purchases of Rs 2,839.22 crore against gross sales of Rs 2,365.91 crore, resulting in a net inflow of Rs 473.31 crore.

In the hybrid segment, FIIs stood as net buyers, with gross purchases of Rs 188.19 crore and gross sales of Rs 141.79 crore, leading to a net inflow of Rs 46.40 crore.

Outlook for the coming week

On September 12, traders will keep an eye on the Index of Industrial Production (IIP) and Consumer Price Index (CPI) respectively. Retail price inflation in India jumped to 7.44% in July 2023, the highest since April 2022.

Traders will also be looking forward to the Wholesale Price Index (WPI) data, scheduled to be released on September 14. Foreign Exchange Reserves and Balance of Trade data going to be released on September 15.

On the global front, investors would be eyeing a few economic data from the world’s largest economy, the United States (US), starting with Consumer Inflation Expectations on September 11 followed by Redbook on September 12, Inflation Rate on September 13, Initial Jobless Claims, Producer Price Inflation, Retail Sales on September 14, Industrial Production, Manufacturing Production, Import and export prices, Michigan Consumer Sentiment and Baker Hughes Oil Rig Count on September 15.





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